Radical re-think of UK's wages

Pat494 · Jun 1, 2008

Surely the time has come for a radical change in Britain's wage structures ! The bad old days of greedy overpaid bosses and stroppy Unions demanding their year-in-year-out wage rises is a thing of the past, like the 20th century.
I would suggest a much fairer division of profits. First the creditors and shareholders are paid off, then the wages are adjusted to the health of the company. In good times there is a bigger but fair distribution AND conversely in hard times wages should go down to stay in business until things pick up again. The usual remedy for hard times is make the lowest paid redundant. This is an unfair policy which is imho also counter productive. Team spirit should be built up over the years, not by piddling wages at the bottom and huge salaries at the top or redunundancies for only those at the bottom.
If Britain is to survive in the ever more competitive business world it MUST change and soon!!!

Trader333 · Jun 1, 2008

The usual remedy for hard times is make the lowest paid redundant

When I worked in several different industries this was not the case. What happened was that the whole business was restructured to meet the change in market demands. Yes it involved reducing lower paid staff but it also included all levels up to and including senior management. The general set up is that you have more lower paid staff than higher paid so when any restructure takes place it is inevitable that more lower paid will go. Also there is no point in keeping staff on if there is not the work for them to do so again this is not an efficient or effective model. To be competitive Britain will have to either be more cost effective than its competitors or have something of value that cannot be obtained from competitors. The latter is the only real option for us as the emerging economies can produce at a cost we cannot even dream of.

There also needs to be incentives to further your education and be entrepreneurial which can only come through greater rewards for those that do. If you give everyone the same then no one will bother to strive for anything greater.

Paul

arabianights · Jun 1, 2008

Who in their right mind would want to work for a company where payment of dividends came before their salary?

(Apart from us prop traders)

You realise in an efficient market this would drive yields on equities below those on bonds right?

Pat494 · Jun 1, 2008

Trader333 said:
1.When I worked in several different industries this was not the case. What happened was that the whole business was restructured to meet the change in market demands. Yes it involved reducing lower paid staff but it also included all levels up to and including senior management.The general set up is that you have more lower paid staff than higher paid so when any restructure takes place it is inevitable that more lower paid will go. Also there is no point in keeping staff on if there is not the work for them to do so again this is not an efficient or effective model.

2, To be competitive Britain will have to either be more cost effective than its competitors or have something of value that cannot be obtained from competitors. The latter is the only real option for us as the emerging economies can produce at a cost we cannot even dream of.

3.There also needs to be incentives to further your education and be entrepreneurial which can only come through greater rewards for those that do. If you give everyone the same then no one will bother to strive for anything greater.

Paul

1.I am suggesting that laying off staff is very bad for team morale and is one of the last alternatives. Its usually involves those at the bottom first rather than those responsible for the sad state of affairs. By the time their cushy jobs are in jeopardy ir will be too late - the whole company is probably on the skids.

2.Innovation and original and constructive thinking is really hard but not impossible.

3.I wasn't suggesting giving everyone the same - just a fair return.

The present set-up is reminiscent of British Leyland/Rover and look what happened to them

Pat494 · Jun 1, 2008

arabianights said:
Who in their right mind would want to work for a company where payment of dividends came before their salary?

(Apart from us prop traders)

This is to assure investors that their savings are "safe"

arabianights · Jun 1, 2008

Pat494 said:
This is to assure investors that their savings are "safe"

I understand your reasoning which is why I said yields would crash... But why do stock investors deserve safe investments? Anyway weren't tier 1 mortgage cdos 'safe'?

Trader333 · Jun 1, 2008

1.I am suggesting that laying off staff is very bad for team morale and is one of the last alternatives.

It is almost worse for team morale to have people stood around doing nothing when there is not the work to be done. I have seen team morale actually get boosted by job losses as it gives greater motivation to ensure a business survives so it is not that simple.

Its usually involves those at the bottom first rather than those responsible for the sad state of affairs.

Not in my experience it hasn't and why do you presume that it is poor management that has caused the situation ? Often it is changing market dynamics or ridiculous government legislation that cause problems.

By the time their cushy jobs are in jeopardy ir will be too late - the whole company is probably on the skids.

This is a very one sided view and I don't know where you get the idea that management is cushy because in my experience it is anything but that . I don't doubt there are many cases of poor management that has contributed to this sort of thing but it is certainly not always the case.

Paul

Gumping · Jun 1, 2008

Trader333 said:
It is almost worse for team morale to have people stood around doing nothing when there is not the work to be done. I have seen team morale actually get boosted by job losses as it gives greater motivation to ensure a business survives so it is not that simple.

Not in my experience it hasn't and why do you presume that it is poor management that has caused the situation ? Often it is changing market dynamics or ridiculous government legislation that cause problems.

This is a very one sided view and I don't know where you get the idea that management is cushy because in my experience it is anything but that . I don't doubt there are many cases of poor management that has contributed to this sort of thing but it is certainly not always the case.

Paul

I agree. where I work, a shrinkage in headcount was required. It was decided that a couple of directors would be shed, instead of the 'low-paid workers'. What it has led to is a bit of a leadership vacuum. People are looking to management for motivation and reassurance in a pretty tough time, and since the remaining directors are run off their feet, there is nobody there to provide it - and hence morale is sinking rapidly.

dick_dastardly · Jun 2, 2008

Trader333 said:
The general set up is that you have more lower paid staff than higher paid so when any restructure takes place it is inevitable that more lower paid will go. Also there is no point in keeping staff on if there is not the work for them to do so again this is not an efficient or effective model.

I remember this one place I worked at years ago, I could always tell when management were thinking about making redundancies, they would put all the brown noses and grassers on important projects and/or promote them to positions of safety above the cull zone.

I used this knowledge to take pre-emptive action and safeguard my own position. One of my favorite tricks was to take out a short term interest free loan from the company ( something we were allowed to do back then ) and this way I always managed to survive the culls.

Eventually, as a result of this negative selection process the company began to decline so I decided to move on before it hit the rocks.

dd

Pat494 · Jun 2, 2008

The negative selection process describes the process imo of post maturity of a company or any other body.
I had a similiar experience as Dick-D. The company I worked for had the first computer in Europe outside of Bletchly Park in the 50s. By the 80s they still only had a small computer department. IBM etc. left them standing. Exactly the same with its supermarket department. Tesco etc. trounced them with ease. Needless to say they were taken over. What wasted opportunities !! The management treated themselves to free lunch, free limo etc. etc. with all the trimmings right up to the end.
The staff canteen was however partly subsidised if you could keep the content down. YUK
Good ole Blighty - on the ropes and still snoring

0007 · Jun 2, 2008

Trader333 said:
.......... To be competitive Britain will have to either be more cost effective than its competitors or have something of value that cannot be obtained from competitors. The latter is the only real option for us as the emerging economies can produce at a cost we cannot even dream of.

There also needs to be incentives to further your education and be entrepreneurial which can only come through greater rewards for those that do. If you give everyone the same then no one will bother to strive for anything greater.

Paul

Absolutely true. We now have to live entirely by our brains & wits. Problem is, how do you employ the great masses that do not have sufficient wherewithal to participate? I can only see an extension of the system whereby the producing few support the rest - there just aren't the openings for the masses like the old days.

dick_dastardly · Jun 2, 2008

Pat494 said:
The negative selection process describes the process imo of post maturity of a company or any other body.

Yes I think you're right there Pat.

The company I worked for started up just before the Second World War. Looking back I can see now that the company aged and went through the same phases of life as the guy that owned it.

He had no sons so as soon as his daughters got their hands on it they flogged it on.

I don't blame them, they probably knew more about what was going on there than the people who actually worked for the company.

Without the old man to watch over it I think it's doomed.

dd

Radical re-think of UK's wages

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